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Risky business: how to use ‘buy now, pay later’ safely


Buy now, pay later (BNPL) schemes have swept the nation in recent years. From Clearpay to Klarna, they’re advertised particularly through programmes such as ITV2’s Love Island and celebrity endorsements.

It’s really easy to sign up to – all it takes is a few clicks – but it’s just as easy for something to go wrong. And trying to fix a problem, should one pop up, can be harder than trying to find the perfect outfit.

The processes will be different across different BNPL schemes, which understandably can become complicated, especially if you’re using more than one. Missing payments can hurt your credit score, so it’s important to be clear on your agreement and its T&Cs before entering into one.

As such, we thought we’d give you some tips on how to safely use BNPL next time you hit that online checkout.

Be punctual with your returns

One of the main perks of using BNPL schemes is that it allows you to buy a caseload of clothes, and you only need to pay for what you keep – which is especially beneficial to those who like to order things in multiple sizes.

But it’s important to remember that if you’re making any returns to do it swiftly. This will help to make sure your balance is updated before your payment is due and avoid paying for things you don’t want or have.

How quickly your balance is updated will depend on the scheme you’re using, so if you need to make payments to more than one, make sure you check this regularly to avoid overpaying.

If you think it’s the case that you have overpaid, be sure to request a refund.

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Know your rights

If you purchase something using conventional methods such as your credit card, then you have the security of the being protected by the Consumer Credit Act, specifically section 75.

This means that should anything turn up broken or your order goes missing, then you have the right to claim the money back.

However, the majority of BNPL schemes aren’t regulated by the Consumer Credit Act, so you won’t be privy to this protect – although they do have their own protection policies in place.

As such, it’s important to check this before signing up to an agreement so that you know what you’re entitled to should a problem arise.

Be sure of the penalties/charges

As with all things credit related, there’s a penalty or charge if you miss a payment, so make sure you check this when signing up.

If you are late in making a payment, Clearpay will charge you £6 if you don’t make your payment by 11pm the day after it’s due, and a further £6 if you don’t pay it within a week.

Klarna have three different ways for you to pay, and according to their website:

  • If you choose to pay off the balance within 30 days, then there is £0 invoice charge per purchase
  • If you choose to split the cost into three payments and default, then they may charge the amount to any card they have on file for you and may stop you from using the service
  • For those who use the ‘slice it’ agreement, there’s a £12 charge if you don’t make the minimum payment on time, and a further £12 if they have to send you a chaser letter

Laybuy’s fees are similar to Clearpay, charging £6 if you don’t pay within 24 hours of the due date and a further £6 if you don’t bring the account up to date within a week. However, they can also charge you £12 for each payment missed or paid late.

It’s also possible for your account to be passed to a debt collection agency if you don’t keep up with the payments, so keep this in mind when you’re considering BNPL at the checkout.

Set reminders for your payments

This is one of the most important things to remember if you’re signing up for a BNPL scheme. Missing payments will ultimately hurt your credit score as it will be noted on your report for six years.

With some BNPL providers, the payments will be taken automatically due to you registering with a card initially. And depending on how many you use this could be on multiple dates throughout the month.

It will be detailed in your agreement when you’ll need to make payments, so be sure to note these down and set reminders in your phone or on your calendar to remind you to keep money in your account.

At the end of the day, buy now, pay later schemes can be great, but only if you use them safely. We hope you enjoyed our tips and put them to use should you ever need to.

If you’re struggling with money worries and debt, contact us today. Our advisers are on hand to offer you free and confidential advice tailored to your situation; all you need to do is contact 0808 2234 102 or click the button below to be connected.

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